Power deal delivers new star to Buffett's energy constellation
The boards of both companies have approved the deal, which still requires the approval of both shareholders and regulators.
MidAmerican Energy will pay $26.50 per share in cash for Constellation. Shares in the Baltimore-based utility company had traded as high as $67.87 last week before hitting a low of $13 on Tuesday, following concerns about liquidity and "accounting issues".
The announcement comes just a day after Constellation said it had hired Morgan Stanley and UBS to act in an advisory capacity to evaluate "strategic alternatives," language often used by companies seeking a buyer, merger or acquisition. In a statement, Buffett said: "MidAmerican has been a wonderful steward of its energy assets and the acquisition of Constellation Energy, when completed, will prove beneficial to all constituents."
Mayo A Shattuck III – chairman, president and chief executive of Constellation Energy – acknowledged the deal came as "the financial-services sector and energy commodity markets have witnessed unprecedented volatility".
MidAmerican's deal ends speculation that French nuclear power giant EDF would make an offer for Constellation.
EDF said it is keeping its options open and intends to be a part of what it calls the nuclear revival in the US.